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2010 (3) TMI 1261 - HC - Income Tax

Issues Involved:
1. Whether the trial court was right in saying Ex.A.1 - agreement of sale is not proved to be genuine?
2. Whether Ex.A.1 - agreement of sale is true and binding upon Defendants No.2 and 3?
3. Whether obtaining sanction from the competent Court for entering into the agreement for alienation of share of minors is not necessary as contended by the Appellant?
4. Whether the 1st Defendant has committed breach of contract as contended by the Appellant/Plaintiff?
5. In the facts and circumstances of the case, when the 1st Defendant passed away, whether the Plaintiff is entitled to the equitable relief of decree for specific performance or to what relief she is entitled?

Detailed Analysis:

Points No. 1 and 2:
The suit property was originally owned by the paternal grandfather, Venkatapathy, who allegedly left a will bequeathing the property to his son Jayaram with only life interest. However, no will was produced to substantiate this claim. The property was subsequently relinquished by Jayaram's mother and sister in favor of the Defendants through a release deed (Ex.A.19). The trial court doubted the genuineness of the sale agreement (Ex.A.1) based on the denial of the 1st Defendant's signature by D.W.1. However, the Plaintiff provided substantial evidence including the pay order (Ex.A.2) and bank certificate (Ex.A.26) proving the advance payment of Rs. 3,20,000. The court concluded that the execution of Ex.A.1 was well proved by the Plaintiff.

Point No. 3:
The agreement included a clause that the 1st Defendant must obtain court permission to sell the minors' share. The 1st Defendant did file H.M.G.O.P.No.433 of 1994 seeking such permission but later withdrew it. The court noted that while permission under Section 8 of the Hindu Minority and Guardianship Act is not required for the undivided interest in joint family property, the inclusion of the clause in the agreement indicated a conscious decision by the parties. Thus, the Plaintiff cannot now argue that such permission was unnecessary.

Point No. 4:
The Defendants argued that the sale price of Rs. 16,75,000 was too low, suggesting it was not in the minors' interest. They presented evidence of a higher property valuation in 2000, but no evidence was provided for the property's value in 1994. The court found that the 1st Defendant's withdrawal of H.M.G.O.P.No.433 of 1994 constituted a breach of contract. The Plaintiff demonstrated readiness and willingness to perform the contract, supported by evidence of financial means and the issuance of a legal notice (Ex.A.13).

Point No. 5:
The court emphasized that granting specific performance is discretionary and should consider fairness, justice, and equity. Given the increased property value and the death of the 1st Defendant, compelling Defendants No.2 and 3 to execute the sale would cause undue hardship. Instead, the court directed Defendants No.2 and 3 to refund the advance amount of Rs. 3,20,000 with interest at 7.5% from the date of filing the suit until realization.

Conclusion:
The appeal was partly allowed. The judgment and decree of the trial court were set aside. Defendants No.2 and 3 were ordered to refund Rs. 3,20,000 with interest at 7.5% per annum from the date of the plaint till the date of realization. They were also directed to pay costs throughout the suit and appeal to the Plaintiff.

 

 

 

 

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